Reason Foundation

It Is Broadband Stimulus Day in D.C.

Today we learn a little more about who might get some of the $7 billion Congress is doling out for broadband infrastructure as part of the Obama’s massive government spending plan.

A public meeting is getting underway this morning. Officials from the U.S. Department of Agriculture, Commerce Department and Federal Communications Commission are on deck to describe “in broad strokes,” according to Dow Jones, how the grant program will work. The Commerce Department is charged with distributing $4.7 billion, and the USDA will give out $2.5 billion for broadband Internet buildout in areas that have little or no connectivity.

Naturally, the big fight will be how the pot is divided among the private sector and the public sector, and how many failed municipal operations might show up looking for a bailout. (Institute for Policy Innovation reminds us of the fiscal wreckage here). Meanwhile, telephone, cable and wireless companies invested close to $115 billion in 2007 alone in infrastructure, much of it broadband upgrades, and some $350 billion in the four years preceding, according to the Bureau of Economic Analysis.

While Ben Scott, director of the progressive Free Press, gives lip service to prioritizing buildout in unserved areas, he nonetheless seems to support the use of government funds to compete with the private sector, suggesting that stimulus funds should be directed to areas “where the standard of broadband being offered is very low.” Unfortunately, we don’t know his definition. Current cable modem speeds of 15 Mb/s can be considered low next to fiber’s potential of 100 Mb/s.